TMI Blog2019 (6) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... eir customer. Hence at the time of receiving the order and dispatching of the said products both, the applicant and their customer are aware that what will be sent by the applicant and received by the customers are cartons/ boxes. We agree with the contention of the applicant that the essential character of such items remains as cartons or boxes to hold goods, though certain manual or mechanical activity has to be carried out on the same to achieve the required objective. We also agree the said packaging materials supplied to their customers in flat form cannot be used by the customers in any form other than as cartons or boxes to hold goods. The case laws cited by the applicant in respect of ATUL GLASS INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [ 1986 (7) TMI 90 - SUPREME COURT] support their contention that the packaging materials viz cut to size blanks and supplied in flat form manufactured by TCPL with corrugation and having requisite creases at designated places, supplied in flat form shall be classifiable under Tariff Item Code 4819 chargeable to GST at 12% and we agree with the same. The packaging materials viz. cut to size blanks manufactured by TCPL with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturers of folding cartons, printed blanks outers, litho lamination, plastic cartons, blister packs, and shelf ready packaging. It also manufactures packaging material using films etc. There appears a doubt on the classification and applicability of GST of items namely (a) packaging materials viz cut to size blanks manufactured by TCPL with corrugation and having requisite creases at designated places, supplied to the Customers in flat form with folding and (b) printed materials which are in flat form, e.g. hanging cards, without creases having corrugation and supplied to customer in flat form. We require an advance ruling on whether the packaging materials viz cut to size bianks with corrugation and having requisite creases at designated places, supplied to the Customers in flat form with folding will fall under (a) Tariff Item Code [4819] - Cartons, boxes and cases of corrugated paper or paper board [chargeable at 12% GST); OR (b) Tariff Item Code [4823] - Other paper, paperboard, cellulose wadding and webs of cellulose fibres, cut to size or shape ; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres (other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks manufactured by TCPL with corrugation and having requisite creases at designated places, supplied to the Customers in flat form with folding 2.1 The Applicant is engaged in manufacturing of cartons of corrugated paper or paperboard falling under HSN Code 4819 leviable to GST at the rate of 12%. The cartons are folded on three sides and glued on the fourth side. They could be having fock bottom facility with opening at the top. A specimen of carton made of corrugated paper or paperboard is produced before your good-self. 2.2 Further, to aforesaid, the applicant is also engaged in manufacturing of cut to size material with corrugation in flat form. Under the said category, the material has corrugation, however the customers are supplied the material in flat form. The customer folds the blanks into carton at the requisite creases manually or mechanically at their place. A specimen of cut to size material with corrugation in flat form is produced before your good-self. 2.3 We are also enclosing herewith the captioned classification of Chapter 48 of HSN Code namely Paper And Paperboard; Articles of Paper Pulp, of Paper or of Paperboard for yo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed by the Hon ble Supreme Court that the goods requiring complicated process to make final products cannot be considered as unfinished goods having essential character of complete articles. 2.7 We would like to bring this to your kind notice that in the instant case, the transformation of packaging materials in flat form to its ultimate use i.e. cartons or boxes to hold goods is not at all a complicated process and can be carried out by folding the blanks into carton at the requisite creases manually or mechanically. The said process does not require any technical expertise or sophisticate machineries or multiple processes to yield the required results. 2.8 The Hon ble Madras High court in the case of Motor Industries Co. Ltd. vs Assistant Collector of Customs [1992 (62) ELT 13) = 1992 (3) TMI 82 - HIGH COURT OF JUDICATURE AT MADRAS held that Rule 2(a) referred to hereinabove can have application to semi-finished goods, which are capable of being used as such with minor adjustment and it cannot have any application with reference to semi-finished goods, which involved major processes for making the goods fit for use. Unless and until the goods in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm, e.g. hanging cards, without creases having corrugation or not and supplied to customer in flat form. STATEMENT CONTAINING THE APPLICANT S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF THE QUESTION(S) ON WHICH THE ADVANCE RULING IS REQUIRED At the outset, please note that while interpreting a taxing statute, the principle and the object of the Act has to be kept in mind and it has to be seen in the light of the scheme of the Act and the context thereof. If the words of the statute are clear, plain, unambiguous, the courts are bound to give effect to that meaning. To find out the exact connotation of a word in a statute, the context in which it is used is to be looked into. The context would quite often provide the key to the meaning of the word and the sense. it should carry. It s settling would give colour to it and provide clue to the intention of the legislature in using it. However, all such interpretation is to be done only in case of ambiguity. It is worthwhile to note that the Notification No.1/2017-Central Tax Rate New Delhi the 28 th June, 2017 prescribing the rate of GST clearly states that Tariff item , su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paper pulp moulded trays, Braille paper, kites, Paper mache articles and should be chargeable at 18% GST. However, there is disparity in the industry on the classification of such items and hence, we would require an advance ruling on the captioned item as well to avoid any dispute accruing in the future. Additional submissions on 13.02.2019 1.0 This is with reference to Application for Advance Ruling filed by Ms. TCPL Packaging Limited (GSTIN 27AAACT1406E1ZV] In short Applicant] bearing Application Reference No. (ARN): AE2712180008832 Dt. 27.12.2018 on the issue of classification of the goods and hearing held on 06-02-2019 before your good-self in this regard, wherein the application was duly admitted. 2.0 As sought by your good-self during the course of hearing, we are submitting herewith the photo of (a) Corrugated Box in Flat Form [both front and back] along with a photo of folded Corrugated Box from the Flat Form; as well as (b) Hanging Card [both front and back), for your kind perusal and the same is marked as Exhibit - 1 for ease of reference. These are the two items which basically required Advance Ruling for your Lordship. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, can be categorized under Tariff item code no 4819 and subject to GST @ 12%. 2. What would be the appropriate categorization and GST rate of printed materials which are in flat form, e.g. hanging cards, without creases having corrugation and supplied to customer in flat form? As per the Notification No. 1/2017- Central Tax (Rate) dated 28th June 2017 by Government of India. 1. The packaging material with corrugation manufactured by TCPL can be categorized under Tariff item code no. 4819 and is liable to tax at the rate 12%. 2. Printed material in Flat form having corrugation would be categorized under Tariff code 4819 and GST rate of tax on outward supply is 12%. 04. HEARING The Preliminary hearing in the matter was held on 06.02.2019, She S. G. Nanavati, Executive Director, along with Sh. Amit Kar, Sr. Gen. Manager Marketing, Sh. Vijay Mane, Asstt. Manager Accounts and Sh. Vikram Khaitan, C.A., appeared and requested for admission of application as per contentions made in their application. Jurisdictional Officer Sh. Arun S. Lagare State Tax Officer (C-840) Nodal Division-4, Mumbai, appeared and made wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e creases manually or mechanically without any further processes. We also find that the said blanks can be used by their customers only as cartons/ boxes, after the folding takes place, without the use of technical expertise. We further find that the said products are dispatched by the applicant to their customers only when they receive orders for cartons/ boxes for packing in DVD players belonging to their customer. Hence at the time of receiving the order and dispatching of the said products both, the applicant and their customer are aware that what will be sent by the applicant and received by the customers are cartons/ boxes. The said cartons/ boxes are probably sent in flat condition is because more cartons can be transported by the applicant in one go. If they prepare the cartons/ boxes and dispatch the same then a lot of space will be utilized during transportation and since conversion from flats to cartons/ boxes does not need any special and technical expertise it is ideal that the same are transported as cut to size blanks. We agree with the contention of the applicant that the essential character of such items remains as cartons or boxes to hold goods, though certain man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation manufactured by TCPL can be categorized under Tariff item code no. 4819 and is liable to tax at the rate 12%. 2. Printed material in Flat form having corrugation would be categorized under Tariff code 4819 and GST rate of tax on outward supply is 12%. We therefore do not take any cognizance of the reply made by the jurisdictional office which is very cryptic and made without any basis. 05. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-105/2018-19/B-33 Mumbai, dt. 22-03-2019 For reasons as discussed in the body of the order, the questions are answered thus - Question :- Whether the packaging materials viz. cut to size blanks manufactured by TCPL with corrugation and having requisite creases at designated places, supplied to the Customers in flat form with folding, can be categorized under Tariff Item Code no 4819 and subject to GST @ 12%? Answer :- Answered in the affirmative. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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